$80 million of unclaimed life insurance is floating around Australia.
As of 2013, a report from the Australian Security and Investments Commission (ASIC) estimated that Australia has about $80 million of unclaimed life insurance payouts.
This is a relatively small fraction of the $1 billion plus unclaimed money total, and it might be worth checking whether you’re owed any money from any other source. ASIC is the organisation that holds these funds until the rightful owners claim them.
How to claim the payout
If you think you may be owed money from unclaimed life insurance or other sources, the first step is to make a search on the ASIC unclaimed money register. If you find your name or the name of a family member, then there might be money you can claim.
To claim life insurance payouts you need to contact the relevant insurer or friendly society; you should be able to get their contact details from ASIC. The insurer will then contact ASIC, which will give them the funds to pass on to you.
Why is there so much unclaimed money?
It can happen more easily than you might think. Superannuation is one of the main areas where money languishes unclaimed, and unpaid life insurance accounts for tens of millions of dollars.
Superannuation typically comes with life insurance, so whenever someone with a super fund passes away, their loved ones might be owed a life insurance payout.
However, life insurance can go unclaimed because:
- Claims might take months, or even years, to be paid out.
- Someone might hold a life insurance policy in superannuation without knowing it, and the people close to them don’t realise that they’re entitled to a payout.
- It’s common for people to travel or move after the death of a loved one, which can make it harder for insurers to track down beneficiaries.
- The immediate beneficiaries may also have died, in which case the money needs to be passed on further. Tracking down the rightful inheritors can take time.
How long does a claim take?
It generally only takes a few minutes to run a search for unclaimed money life insurance payouts online. If you find any that you are owed, you should contact the insurer, which will contact ASIC within a couple of business days.
After that it will typically take around 28 days for ASIC to release the funds to the insurer, and the insurer will then release the funds to you. Generally you can expect the whole process to take around a month.